Markets Wired

At the request of the Federal Trade Commission, a federal judge has ordered Sili Neutraceuticals, LLC and Brian McDaid to pay more than $2.5 million for making false advertising claims and sending illegal e-mail messages in violation of the FTC Act and the CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act).

On January 23, U.S. District Court Judge David H. Coar ordered the company and McDaid, individually and doing business as Kaycon, Ltd., to stop misrepresenting any products or services, including hoodia – or human growth hormone-related (HGH) products, and stop sending illegal spam. The court also entered a judgment against the defendants in the amount of $2,569,851.77. In August 2007, the FTC charged the defendants with CAN-SPAM violations and making false and unsubstantiated claims about hoodia weight-loss products and HGH anti-aging products, and a district court judge ordered a freeze of their assets and a halt to the e-mails and product claims.

Judge Coar found that the defendants violated the FTC Act by falsely claiming that the hoodia products cause rapid and substantial and permanent weight loss, and that the HGH products contain human growth hormone and/or cause a clinically meaningful increase in growth hormone levels and/or will turn back or reverse the aging process. The CAN-SPAM Act violations were sending commercial e-mail messages that have misleading subject headings, and that fail to provide clear and conspicuous notice of the opportunity to decline to receive further spam from the sender, and/or a functioning return e-mail address, and the senders’ valid physical postal address. According to the FTC’s complaint, the spam drove traffic to the defendants’ Web sites, which sold the products.

The FTC would like to thank SecureWorks and Microsoft for their assistance in this matter.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.